ASST CIT 17(1), MUMBAI vs. DAWN INDIA, MUMBAI

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ITA 4603/MUM/2016Status: DisposedITAT Mumbai09 February 2018AY 2008-095 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that since the primary addition on which the penalty was levied (warehouse charges) was deleted by the ITAT, no penalty was leviable. The deletion of penalty for disallowance under Section 14A was also upheld based on settled law.

What were the facts?

The Revenue appealed against the CIT(A)'s deletion of penalty levied under Section 271(1)(c). The penalty was based on additions made for warehouse charges and disallowance under Section 14A. The ITAT had previously deleted the addition related to warehouse charges in the assessee's own appeal.

What were the issues?

Whether penalty under Section 271(1)(c) can be levied when the underlying addition has been deleted by a higher appellate authority. Whether penalty is leviable for disallowance under Section 14A when there is no concealment of material facts.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 40(a)(ia),Section 14A

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, “C” BENCH, MUMBAI

Before: SHRI RAJENDRA, AM & SHRI AMARJIT SINGH, JM

Hearing: 05.02.2018Pronounced: 09.02.2018

O R D E R

PER AMARJIT SINGH, JM:

1.

The revenue has filed the present appeal against the order dated 13.04.2016 passed by the Commissioner of Income Tax (Appeals)-28, Mumbai [hereinafter referred to as the “CIT(A)”] relevant to the AY. 2008-09.

2.

The revenue has raised the following grounds: -

1 “On the facts and in the circumstances of the case and in Law, the Ld. CIT(A] has erred in directing to delete the penalty levied u/s 271(1)(c) of the Act in respect of the disallowances of Rs,1.56 Crores out of the amount of warehouse charges by invoking the provision of sec 40(a)(ia) of the Act -without A.Y. 2008-09 appreciating the fact that the said addition has been confirmed by the Ld. CIT(A) in the quantum appeal preferred by the assessee," 2/ On the facts and circumstance of the case and in law the learned CIT(A) has erred in directing to delete the penalty levied u/s 271 (l)(c) of the Act in respect of the disallowances of Rs. 1.56 Crores out of the amount of warehousing charges by invoking the provision of sec 40(a)(ia) of the Act. Without appreciating the fact, the Hon’ble Delhi High Court in the case of CIT vs Zoom Communication (P) Ltd, 327 1TR 510 and CIT vs, N.G Technologies Ltd. 57 taxmann.cm.389 has unambiguously held that if assessee makes a claim which is not only correct in law but is also wholly without any basis and explanation furnished by him for making such a claim is not found to be bona fide. Explanation 1 to section 271(l)(c) would done in to play and assessee will be liable to penalty." 3.. "The appellant prays that the order of the AO should be restored and order of the CIT(A] should be set aside." 4 The appellant craves leave to amend or alter any ground or add a new ground which may be necessary.”

3. The brief facts of the case, are that the assessee filed his return of income on 30.09.2008 declaring total income to the tune of Rs.66,28,970/-. The assessment was completed u/s 143(3) of the I.T. Act, 1961 on 20.12.2010, determining the total income to the tune of Rs.2,50,99,870/-, after making certain additions/disallowance which include (a) Disallowance u/s 40(a)(ia) of the Act in respect of Reimbursable Expenses/ (b) Disallowance u/s 14A of the Act of Rs.20,439/- on which penalty proceeding was initiated. Thereafter the assessee filed an appeal before the CIT(A) who confirmed the order of the AO order dated 20.03.2012. Thereafter, the assessee has filed an appeal before ITAT challenging the order of the CIT(A) which was pending at the time of initiating the proceeding u/s 271(1)(c) of the ITA. No. 4603/M/2016 A.Y. 2008-09

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